It’s Jinxed

Mar. 15 (LBO) – Sri Lanka's parliament is due to take up the Companies Act within the next two months, after a delay of nearly 13 years. The draft bill, first prepared by a New Zealand consultant in 1994, will replace the present Companies Act of 1982, said Chanaka de Silva, Senior Partner of Nithya Partners, a corporate law firm.

However, there are fears that the proposed law may already be outdated as many countries have moved on since the law was drafted.

"This piece of legislation, when passed, will however be 13-years too late," notes Aritta Wikramanayake, Senior Partner of Nithya Partners, while addressing participants during a legal conference organized by the Alumni Association of the International Development Law Organisation.

Despite lengthy delays, the piece of legislation will speed up capital market activity, allowing for things like leverage buyouts and allow companies to buyback their shares.

The law discards the traditional Memorandum of Association, scraps the concept of 'par value' of shares, brings in minority buyout provisions, introduces a 'solvency test' for directors and gives statutory recognitio

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